Random ATO audits ensure employment tax compliance for businesses.

The ATO has recently initiated random audits on businesses to assess their employment tax compliance and proper record-keeping.  Conducted through the ATO’s Random Enquiry Program (“REP”), which was previously reserved for individual and business income tax returns, audit notices were issued to businesses selected at random (regardless of their size or turnover) just prior to Christmas last year.

These audits comprehensively cover all aspects of business employment tax obligations.  Past audits conducted by the ATO were for specific obligations like super, they were previously triggered by data matching or complaints and not done at random or at this scale.  This new approach to business audits cover all employment taxes – PAYG, FBT, and superannuation.

There is a significant emphasis on maintaining reasonably accurate records throughout the period of review.  The audit notice requests a schedule of documentation to substantiate compliance and it’s encouraged that businesses make voluntary disclosure (and potentially reduce any penalties) if an error is identified whilst compiling this information.  The request list is very specific and extensive which includes information such as financial statements, payroll records, log books and bank statements. 

These all-encompassing audits are a drain on resources for businesses, therefore it’s very important that businesses focus on employment tax compliance, ensuring proper records are kept and easily accessible in the event a business is subject to a random audit.

If you have any questions about your employment tax obligations or proper record keeping, please get in contact with us at the office.